Key equity benchmarks extended
their rally on Tuesday to end with strong gains. The markets began with
marginal gains, on the back of sluggish growth of microeconomic indicators. The
growth of eight core infrastructure industries slowed down to 2.1% in February
2019 as compared to 5.4% in February 2018, due to fall in output of crude oil
and refinery products, while the Indian manufacturing sector lost its growth
momentum in the month of March, on the back of softer increases in new orders,
production, input buying and employment. As per the survey report, the Nikkei
India Manufacturing Purchasing Managers' Index (PMI) - a composite
single-figure indicator of manufacturing performance - eased to 52.6 in March
from 54.3 in February. Traders took a note of the report stating that apart
from a shortfall of nearly Rs 35,000 crore in direct tax revenue, the Centre
seems to have suffered a larger deficit of Rs 60,000 crore or thereabouts in
its share of goods and services tax (GST) revenue also for the fiscal year
(FY19). But, in volatile trade, key indices managed to add gains during noon
deals, supported by the Reserve Bank of India's (RBI) statement that it will
inject long-term liquidity worth $5 billion into the banking system through
dollar-rupee buy-sell swap for a tenure of three years. The swap auction will
be held on April 23, 2019. Some comfort also came with a private report that
the government has been able to contain its fiscal deficit around 3.4% of the
GDP in 2018-2019 by resorting to withdrawals/cash support from public accounts
and savings on expenditure. Adding relief, ratings agency CRISIL in its
half-yearly report on credit movements said that system wide non-performing
asset (NPA) ratios will improve by 180 basis points (bps) to 8.5 percent in
March 2020 from FY19 levels on the back of moderation in slippages coupled with
recoveries from the bankruptcy resolutions. It also noted that public sector
banks (PSBs) will turn more profitable for first time in four years. Finally,
the BSE Sensex rose 184.78 points or 0.48% to 39,056.65, while the CNX Nifty
was up by 44.05 points or 0.38% to 11,713.20.
The US markets ended mostly
higher as investors stayed on the sidelines a day after a rally inspired by
upbeat manufacturing data out of China and the US. Some cautiousness also
prevailed in the markets after rising for three consecutive sessions, Treasury
yields retreated 1.8 basis points to 2.478%, as investors worried about rising
uncertainty surrounding Britain's planned exit from the European Union. The UK
parliament failed for a second time to win a majority for an alternative option
to Prime Minister Theresa May's rejected Brexit agreement, raising the chances
that the UK could leave the European Union with no deal in place, a potentially
destabilizing event for the European and global economies. Besides, traders
were looking for more concrete developments out of ongoing US-China trade talks
before making more significant moves. On the economic front, orders for US
manufactured durable goods showed a steep drop in the month of February,
according to a report released by the Commerce Department, with orders for
transportation equipment leading the way lower. The Commerce Department said
durable goods orders tumbled by 1.6% in February after inching up by a
downwardly revised 0.1% in January. The significant decrease in durable goods
orders came as orders for transportation equipment plummeted by 4.8% in
February after rising by 0.4% in January. Orders for non-defense aircraft and
parts nose-dived by 31.1% in February after soaring by 9.2% in the previous
month. Nasdaq gained 19.78 points or 0.25 percent to 7848.69 and S&P 500
was up by 0.05 points to 2867.24, while Dow Jones Industrial Average declined
79.29 points or 0.30 percent to 26179.13.
Extending their gains for third
straight session, crude oil futures ended higher on Tuesday, as traders
continued to find encouragement in signs of tightening supplies and fading
worries over global economic growth. The optimism has spread through investment
banks, with many bumping up their price predictions for 2019. Banks have raised
their forecast for the price of Brent crude, the global benchmark, in 2019.
Brent will average just over $68 a barrel this year. Benchmark crude oil
futures for May surged 99 cents or 1.6 percent to settle at $62.58 a barrel on
the New York Mercantile Exchange. June Brent crude gained 36 cents or 0.5
percent to settle at $69.37 a barrel on London's Intercontinental Exchange.
Continuing strong recovery
momentum for the second day, Indian rupee ended significantly higher against US
dollar on Tuesday, on account of selling of American currency by banks and
exporters. Traders took encouragement with report that the Reserve Bank of
India (RBI) will again swap up to $5 billion to infuse durable liquidity in the
system, a month after the first swaps saw a massive response from banks. Market
participants offered up to $16.31 billion against the notified amount of $5
billion in the auction held on March 26. The next auction for three-year tenure
will be held on April 23. Traders overlooked a private survey showing that
India's manufacturing activity slowed to a six-month low in March as orders and
output expanded at a weaker rate, thereby easing job creation to its lowest in
eight months. On the global front, euro fell to a three-and-a-half week low and
stood precariously near its weakest since June 2017 on Tuesday, as investors
seized on relatively strong data out of the US to buy the dollar. Finally, the
rupee ended at 68.74, 40 paise stronger from its previous close of 69.14 on
Friday.
The FIIs as per
Tuesday's data were net buyers in equity and debt segments both. In equity
segment, the gross buying was of Rs 20678.37 crore against gross selling of Rs
11126.57 crore, while in the debt segment, the gross purchase was of Rs 6936.50
crore with gross sales of Rs 1929.54 crore. Besides, in the hybrid segment, the
gross buying was of Rs 641.22 crore against gross selling of Rs 38.37 crore.
The US markets ended mixed on
Tuesday, as investors looked for more signs of strength in the economy in the
wake of growth worries. Asian markets are trading higher in early deals on
Wednesday as investors looking for more concrete developments out of ongoing
US-China trade talks set to continue in Washington. Indian markets ended higher
for fourth straight session on Tuesday, with Sensex closing at all-time high
level supported by strong global cues. Today, the markets are likely to open
marginally in green following positive trend in Asian peers. Traders will be
getting some support with a report that India's exports are likely to register
an all-time high of $330 billion in FY19, amid slowing global merchandise trade
growth. Besides, March exports are expected to be above $30 billion, buoyed by
strong performances by engineering and pharmaceuticals sectors. Investors also
looking for the outcome of Reserve Bank of India's (RBI) Monetary Policy
Committee (MPC), which started on April 02, to be announce on April 04. There
are expectations of a cut in key lending rate by another 25 basis points to
boost economic activities. However, there may be some cautiousness with a
private report that the Central Board of Direct Taxes (CBDT) has collected Rs
1,117,416.5 crore (11.17 lakh crore) in total direct taxes in FY 2018-19, a
shortfall of around Rs 83,000 crore or 7.4 percent of the Rs 12 lakh crore collection
target. Traders may be concerned as the World Trade Organisation's (WTO)
forecasted that global trade growth is expected to be lower in 2019 than it was
last year, citing widespread tensions and economic uncertainty. Meanwhile, SEBI
has issued a circular regarding empanelment of insolvency professionals to be
appointed as administrators under the regulator's framework. An administrator
has to be a person registered as an insolvency professional with the Insolvency
and Bankruptcy Board of India (IBBI) and empanelled with the board from time to
time. There will be some buzz in the banking sector stocks with ICRA's report
that the quashing of RBI's 180-day period resolution or NCLT mechanism of NPA
recovery by the Supreme Court can lead to negative impact for the banks if the
loans are not resolved. It added that higher provisioning would have left banks
wanting for more funds from government to meet credit and regulatory capital.
There will be some reaction in telecom sector stocks with report that Cellular
Operators Association of India (COAI), an industry body representing telecom
companies, has sought implementation of the National Digital Communications
Policy 2018 from the new government. The policy approved by the Cabinet in
September last year aims to attract $100 billion investment and create 4
million jobs in the sector by 2022.
Support and
Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,713.20
|
11,669.58
|
11,743.08
|
BSE Sensex
|
39,056.65
|
38,895.18
|
39,169.91
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Tata Motors
|
1,008.34
|
202.95
|
190.70
|
209.80
|
SBI
|
278.98
|
329.00
|
323.73
|
332.63
|
Yes Bank
|
247.09
|
280.30
|
276.05
|
283.30
|
Bharti Airtel
|
200.54
|
356.45
|
346.63
|
362.63
|
ZEEL
|
178.42
|
417.70
|
402.10
|
434.15
|
Maruti Suzuki India has increased price upto Rs 689 across models on account of regulatory compliances.
Tata Motors Commercial and Passenger Vehicles Business sales in the domestic market for FY19 grew by 16% with 678,486 units as compared to 586,507 units over the same period last year.
Coal India has breached the 600 MT mark in coal production and off-take ending FY 2019, clocking growths of 7% and 4.8% respectively.
M&M has reported a 31% decline in total tractor sales in March at 19,688 units.